Don't be enticed by the gold rally, expert says: Investors 'buy gold and hope it doesn't go up'

One helpful way to think about the recent gold rally: it's a case of schadenfreude. The yellow metal does well when other assets — and the world — are in trouble.

As a result, prospective buyers should proceed with caution, experts say. Be prepared to root against your investment, said William Bernstein, author of "The Four Pillars of Investing."

"You buy gold and hope it doesn't go up," he said.

Earlier this week, the gold contract for April gained $30.60, or 1.46%, to settle at $2,126.30 per ounce, the highest level dating back to the contract's creation in 1974. On Wednesday, the metal was trading at $2,158.40.

The safe-haven asset has risen for two consecutive months amid ongoing wars in Ukraine and Gaza, the upcoming presidential election, and uncertainty around interest rates and inflation.

Russian President Vladimir Putin recently warned of nuclear conflict and "the destruction of civilization" if other countries sent group troops into Ukraine. Meanwhile, experts are concerned that Donald Trump would try to pull the U.S. out of NATO if he was reelected, which could raise security risks across the world.

Among the other previous good times for gold: The Great Recession and the start of the Covid outbreak.

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Some Wall Street experts forecast the current rally to continue, anticipating the metal's value to rise to $2,300 or higher over the next 12 to 16 months.

Should investors take part in the doomsday holding? Here's what financial experts said.

Despite brief rallies, the average annual returns for gold far lag stocks and bonds, according to experts.

"When